India's power sector is in a catch-22 situation. A sound analysis of the power sector affirms that the sector is in the ICU where 78,000 MW of projects are under stress; and approximately Rs 1,200 billion worth unviable projects and PPAs are signed for a mere 7,000 MW.

There is a revolution that is sweeping the energy sector globally and in India. The balance now seems to be conclusively tilting towards renewable energy. And, this development is not entirely due to government subsidies, but because these sources of energy are financially viable on their own.

GVK Power & Infrastructure Ltd has signed a Supplementary Power Purchase Agreement with the Punjab State Power Corporation Ltd, for its project located at Tarn Taran in Punjab. This comes in the backdrop of GVK Power (Goindwal Sahib) Ltd, a subsidiary of GVK Power, receiving a letter of award for long term coal linkage for the power plant, which was earlier impacted due to lack of fuel.

Essar Power has decided to surrender the Tokisud North coal block in Jharkhand. The company has already invested Rs 490 crore in the project. The move which comes in the backdrop of facing delays in key approvals and sudden change in tariff terms, will cripple the company's 1,200-MW Mahan plant in Madhya Pradesh.

The outlook for thermal power generation market is not negative as India is still hugely underserved on electricity. The current limbo is caused by a sudden addition of about 100 GW in a five year period, driven by a policy of coal block allocation i.e., a rush encouraged by the premium from fuel shortages.